The real reason Ivanka Trump is in trouble
In the mid-1970s, Congress learned of payments made by a variety of United States corporations in foreign countries to the government officials or the country’s political parties. Congress learned US law did not directly prohibit such payments. Congress remedied that gap when it passed the Foreign Corrupt Practices Act of 1977 (“FCPA”), prohibiting bribery of foreign officials. Specifically, the anti-bribery provisions prohibit the payment of money or “anything of value” to a “foreign official” with the intent to “obtain or retain business.”
Not surprisingly, Donald J. Trump referred to the FCPA as a “horrible law and it should be changed,” asserting that it puts US companies at a “huge disadvantage” on the world stage and stating, “the world is laughing at us.” Despite these comments. Attorney General Jeff Sessions assured a gathering of ethics lawyers that he would continue to pursue FCPA violations.
FCPA violations can be expensive- Siemens AG paid a $450 million fine in 2008. Given the potential trouble that companies can get into by partnering with foreigners (whether a deal might violate the prohibitions of the FCPA), most United States companies doing business in another nation perform extensive due diligence of their proposed partners to avoid potential troubles. This is especially true in places such as Panama (“perceived to be highly corrupt”), the Philippines, and Azerbaijan, as well as many other places.
The Panama deal has raised issues of money laundering of drug money and con artists. This appears to be Trump’s first international real estate deal, and like many of his more recent deals, it is one in which Trump does not own any of the property but merely licenses the name to a third party in exchange for sharing in profits. The Panama deal was allegedly intended “to be [Ivanka’s] baby.” While the family disputes it, Ivanka is said to have met with Alexandre Henrique Ventura Nogueira, a Brazilian charged with unrelated fraud and forgery, several times to promote sales of the property. While the deal did not obligate Trump to do any due diligence of investors or partners, it raised questions about not doing so.
Questions remain about how many of these overseas partnerships developed and one would suspect that the investigation by Mueller and the ones into Cohen are looking for money trails into and out of foreign lands to determine if any potential violations of the FCPA exist.
Daniel is a lawyer writing and teaching about SCOTUS, and is the author of the book “The Chief Justices” about the SCOTUS as seen through the center seat.